Category: Daily Financial Times

Sri Lanka and India will co-host the 2026 T20 World Cup, expected to boost Sri Lanka’s global image and attract more foreign tourists.

Minister of Industry and Entrepreneurship Development Sunil Handunnetti met YAN Xijun, Vice Chairman of the Standing Committee of the Hainan Provincial People’s Council, in Colombo to discuss strengthening bilateral trade.

Sri Lanka’s most valuable resource is its people. Some will contribute to the economy, either by building enterprises or by working for them. Others will be too young to work. Yet others will be considered to have completed their work life.

It is important to understand how many are in what categories and what changes over time mean for the economy and society. Investments may not be made if the right kinds of people are not available. Taxes will have to be increased if the state has to take care of more of the elderly. Health expenditures may be out of control.

The concept of a demographic dividend, wherein the working-age population has to deal with low elder dependency and low child dependency directly or indirectly, is now widely accepted. An example of direct is the expenditures incurred by parents in providing care for pre-school children while they work. Indirect is where taxes have to be paid to fund elder care and the additional demands made on the public healthcare system.

Low elder and child dependencies are seen as having contributed to the rise of the Asian Tiger economies (Korea, Hong Kong, Singapore and Taiwan), more than the industrial policies dear to many Sri Lankan decision makers. If the youthful energies associated with the dividend are blocked from productive activity, insurrections will arise. Sri Lanka has run through its main demographic dividend period from the 1970s with little to show other than deaths and damage from three insurrections.

Recent demographic trendsBetween the years of 2000 and 2014, Sri Lanka experienced an unusual and not yet fully explained increase in births. After 2014, the decline in fertility resumed and accelerated and is now likely to advance when Sri Lanka reaches peak population.

The increased number of children led to greater demand for year-one admissions, which is now sharply declining. It is increasing the numbers entering the workforce at the present time. This will taper off from around 2032.

The workforce will remain constant or even show a slight increase, until the decline kicks in. The immediate challenge is finding productive opportunities for the young people joining the workforce. Then, the challenge will become one of increasing productivity so the economy can be sustained by less workers. However, elder dependency has already started to increase and will accelerate because more people will live longer. The costs to families and society caused by elder dependency are considerable.

The population above 65 is conventionally divided into young-old (65-74 years); middle-old (75-84) and oldest-old (over 85 years). In Sri Lanka, age 60 is used as the marker of old age.

What does all this mean?

For a long, planners have worried about how to deal with the young. Lacking enough opportunities and release valves, they are likely to wreck the kinds of devastation visited upon Kathmandu and Dhaka. It may not be a coincidence that the 2022 Aragalaya coincided with the first of those born during the mini population boom of 2000-2014 reaching working age. This group will keep coming into the workforce until 2034-36. It would be foolish of those in power not to act decisively to expand economic opportunities for them as the highest priority, especially because the escape valve of migration is being gradually shut.

Governments have been fiddling with the retirement age of state employees without a coherent plan. For example, the retirement age was raised, and then lowered in 2022 as part of the crisis response resulting in a large number of retirements that year. Expenditure on salaries and wages of public servants decreased by 4%. But for the same reason, expenditure on pensions increased by 6.3%. In the case of salaries, the state gets something in return. It gets no service in return for pension payments from competent, experienced persons who are forced to twiddle their thumbs at home.

The current retirement age of 60 is unsustainable because of increasing longevity and because the current pension scheme is non-contributory (funded year by year, using taxes paid in future years). The Widows, Widowers and Orphans Fund is contributory, a model for reform. The fiscal deficit cannot be reduced by paying pensions to retirees for 30-40 years. Currently, pensions and gratuity eat up 6% of total Government expenditures and will keep increasing.

While the larger problem is that of establishing a comprehensive social safety net for all the elderly, urgent action is needed to stop the unfunded pension obligation from squeezing out other essential expenditures. Not only are the beneficiaries increasing, the costs are multiplying. What cost Rs. 150 billion in 2014, now costs Rs. 400 billion, a 2.66x increase.

It seemed from the NPP’s 2021 Rapid Response Plan that they were somewhat sensitive to the looming threat of elder dependency. But the first year in power appears to have replaced such concerns with more mundane matters. Unless those in power and those seeking power start now, we will all become victims of the demographic time bomb.

The Sri Lanka Customs is expected to take over the import and export facilitation process of the Board of Investment (BOI) firms from May 2026 onwards as part of a pilot project.

An MOU has been entered into between the BOI and the Customs last week enabling the border control agency to undertake the facilitation processes under a pilot project for a period of about 3-6 months according to the Daily FT’s sister paper The Sunday Times.

Last June, the Government via its Letter of Intent to the IMF pledged to approve necessary legislation by end-October 2025 to mandate the Customs with clear and unfettered responsibility for the clearance, movement, and control of goods to and from the special economic zones. It is reported that Katunayake Free Trade Zone is to be used for this pilot project. The move appears to be part of the broader efforts to increase the state tax revenue as per the revenue-based fiscal consolidation framework mandated by the IMF. Revenue leakage from BOI firms in Sri Lanka primarily stem from extensive tax concessions, misuse of import/export facilities for local profiteering, and a lack of transparent monitoring.

The Customs Director General Seevali Arukgoda has said that there were a large number of fraud cases against BOI companies. For a long time, there has been a huge concern among many that a considerable amount of revenue leakage takes place due to the exploitation of loopholes by BOI firms. There have been instances of few BOI firms getting involved in smuggling and other fraudulent activities. Concerns have been expressed that some BOI firms illegally sell more of their products in the local market than permitted, while still enjoying tax benefits granted for exporting entities.

Despite granting a plethora of tax concessions and holidays, Sri Lanka has failed to attract any meaningful amount of Foreign Direct Investments (FDI) because investors prioritise factors like macroeconomic stability, policy consistency, skilled labour, and infrastructure over tax incentives. According to the tax expenditure statement released by the Finance Ministry, exemptions provided by the BOI had caused a loss of Rs. 23.94 billion in corporate taxes to the Government in 2022 when compared to higher corporate tax rates approved by the Parliament under the IMF program.

Nevertheless, the new development comes in the immediate aftermath of the abolition of SVAT which has caused a great deal of unease and distress among the business community. Furthermore, the Customs is widely perceived by many as an institution in which bribery and corruption is quite rampant and widespread. Investors perceive the Customs as a controlling agency with very little appetite for trade facilitation. But it must be borne in mind that the Customs in the recent past has strived to enhance its trade facilitation credentials although such efforts have not been duly recognised by the observers. Last year, the premier state, revenue-generating agency launched the Authorised Economic Operator (AEO) Program and the participants of the program enjoy a host of benefits including priority processing in Customs clearance and cargo examinations, dedicated service channels at Customs units, as well as reduced physical inspections with reliance on risk-based assessments. Exporters can also avail of the Temporary Import for Export Processing (TIEP) scheme of the Customs to undertake their business operations smoothly.

Notwithstanding the Customs’ initiatives to enhance trade facilitation, the business community has expressed reservations about the proposed move. The Customs has been frequently accused of using their power to delay and disrupt supply chains on various grounds using a 200-year-old ordinance. The Customs as well as the Ministry of Finance need to be mindful of the concerns of the investors and should ensure the changeover takes place with minimum disruptions to the import/export trade of the economy.

The Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) has presented a comprehensive national reform package comprising five strategic Budget proposals aimed at strengthening Sri Lanka’s economic recovery, modernising public service delivery, and preparing the country for inclusion in the World Bank’s Business Ready (B-READY) Index 2026. These proposals stem from the extensive findings of the PwC-FCCISL Business Resurgence Study (2020) and align closely with the National People’s Power (NPP) Government’s economic and social policy direction. Designed within the framework of the 2026 line-ministry Budget allocations, the proposals are ready for immediate implementation.

FCCISL President Keerthi Gunawardane said, ‘Sri Lanka is at a turning point. These proposals give the country a practical path to rebuild confidence, modernise institutions, and strengthen the private sector as a driver of growth. With coherent implementation, we can transform the business environment, accelerate investment, and position Sri Lanka as a globally credible, competitive economy.’

1. Transforming public services and reducing bureaucratic barriers

Sri Lanka’s economic progress has long been constrained by administrative delays, fragmented approval systems, and inconsistent regulatory practices. The Public Service Transformation Fund aims to address these barriers through a decisive national shift toward streamlined, automated, and performance-driven public service delivery. Drawing upon PwC-FCCISL research, this reform initiative promotes complete process re-engineering, digital integration across ministries, and uniform service standards extending from national agencies to District and Divisional Secretariats. The framework strengthens transparency, reduces business costs, and enhances reliability, aligning with global expectations under the B-READY Public Services and Regulatory Quality indicators.

2. Strengthened SME and business resurgence mechanism

FCCISL’s SME and Business Resurgence Mechanism introduce an integrated support system that connects businesses with coordinated public and private services across districts. The mechanism enables enterprises to access fast-tracked approvals, digital service pathways, and channels for dispute resolution-reducing the operational uncertainty and bureaucratic burden highlighted in the PwC-FCCISL study.

FCCISL Director and Public Relations Committee Chairman Ruwan De Silva stated, ‘The true economic engine of Sri Lanka lies in its small and medium enterprises. This mechanism is designed to give every SME, across every district, the ability to navigate challenges confidently, overcome delays, resolve disputes quickly, and secure the support they need to recover and grow. It is a national-level framework built to restore momentum to the real economy.’

By integrating District Chambers, Secretariats, Provincial Councils, ministries, and regulatory agencies, the mechanism supports business resilience, strengthens supply chains, enhances digital adoption, and contributes directly to improved performance under the B-READY pillars of Business Entry, Financial Services, Labour, and Business Continuity.

3. GovData-SL: A digitally integrated platform for reform monitoring and transparency

GovData-SL responds to the urgent need for a unified national data system capable of tracking regulatory performance, approval timelines, and economic indicators. The platform will digitalise and integrate datasets across ministries, departments, regulatory agencies, and District Chambers. This ensures transparent, evidence-based policymaking and provides verifiable indicators required for B-READY reporting. Through real-time monitoring, GovData-SL strengthens the country’s reform credibility and underpins a more transparent, predictable economic environment.

4. National Business Reform and Facilitation Council (NBRFC)

FCCISL proposes the establishment of the National Business Reform and Facilitation Council under the Finance Ministry to coordinate reforms, harmonise regulations, and accelerate administrative decisions across government. The Council will guide cross-ministerial collaboration, monitor implementation progress, resolve systemic bottlenecks, and publish an annual Sri Lanka Business Readiness Report. This framework directly addresses institutional fragmentation and ensures long-term coherence in regulatory reforms, contributing to improvements in B-READY’s Market Competition, Regulatory Framework, Dispute Resolution, and Insolvency indicators.

5.District-Level Entrepreneurship and Competitiveness Program

The District-Level Entrepreneurship and Competitiveness Program expands the proven Galle District Strategic Development Plan into a national model for district development. This initiative strengthens regional competitiveness by integrating District Chambers, District and Divisional Secretariats, Provincial Councils, and line ministries to deliver locally tailored reforms. Through digitalised administration, investment facilitation, SME support, and sectoral development initiatives, the program enhances district economies and contributes to stronger national performance under B-READY indicators such as Business Location, Trade, Taxation, and Local Regulatory Quality.

Foundation in research and alignment with national priorities

These proposals directly address the structural barriers identified in the PwC-FCCISL Business Resurgence Study, including excessive bureaucracy, fragmented approval systems, inconsistent regulatory practices, delays in service delivery, and the need for public-private process re-engineering. The reforms also align with the NPP Government’s goals of modernising state institutions, strengthening SMEs, advancing digital governance, decentralising economic opportunity, and expanding exports, tourism, services, and logistics.

Preparing Sri Lanka for B-READY 2026

FCCISL’s integrated reform package strengthens Sri Lanka’s readiness across all ten B-READY pillars. By modernising public services, supporting SMEs, digitalising data systems, strengthening district-level competitiveness, and embedding structured reform governance, Sri Lanka is positioned to qualify for and perform competitively in the B-READY 2026 assessment. These reforms enhance transparency, predictability, investor confidence, and economic stability.

FCCISL’s expanded national and international call for partnership

FCCISL calls upon the World Bank, all multilateral and bilateral development partners, including ADB, JICA, USAID, UNDP, IFC, EU, and others, to collaborate in strengthening Sri Lanka’s reform trajectory.

In addition, FCCISL urges the engagement of all national, district, and sectoral trade chambers, business associations, councils, and forums, along with professional bodies, regulatory institutes, and industry federations. FCCISL further invites cooperation from international trade chambers, foreign business councils, Sri Lankan bilateral and regional business councils abroad, and the global Sri Lankan business diaspora.

Moreover, FCCISL encourages academics, economists, researchers, scientists, and policy specialists to contribute knowledge, research, and expertise to ensure that Sri Lanka’s transformation is grounded in evidence, innovation, and global best practices.

FCCISL believes that only a unified national and international partnership can deliver the scale of reform required to reposition Sri Lanka as a competitive, resilient, and investment-ready economy.

On 05 November 2025, I wrote an article for Colombo Telegraph titled ‘The Opposition Has No Trump Cards to Play Against the Government.’ That analysis was published well before the Opposition hastily announced its so-called ‘Nugegoda Rally’ scheduled for 21 November 2025. The political landscape was already clear: the Opposition had run out of ideas, narratives, and credibility long before they attempted to gather crowds.

In my article, I demonstrated-with evidence echoing across speeches, press briefings, and parliamentary performances-that the Opposition had been recycling the same five exhausted talking points for months. These were: (a) the overplayed and increasingly unconvincing complaint about the high cost of living; (b) the blatant hypocrisy behind their corruption allegations, coming from individuals who once normalised corruption as a governing method; (c) manufactured claims of oppression aimed at reviving public fear; (d) the Opposition’s deep-seated fear of accountability under the new administration; and (e) their undisguised desperation to recover lost wealth, privileges, and political power.

In short, long before they marched to Nugegoda, the Opposition had already exposed its weakness: they had no new trump cards, no fresh ideas, and no moral authority left to mobilise the public. What remained was a tired script, repeated loudly but empty at its core.

New two trump cards of the Opposition

The Opposition’s fabricated ‘Trump Cards’ and the real history they attempt to rewrite

In their frantic attempt to appear relevant in the national political discourse, the Opposition Rally on 21 November 2025, introduced two so-called ‘new trump cards’ to attack the Government. The first came from Nalin Fernando, who boldly-and irresponsibly-claimed that the JVP insurrections of 1971 and 1988/89 were responsible for a 76-year setback to the country. This assertion was not merely historically inaccurate; it was a deliberate distortion designed to absolve the political class that governed-and misgoverned-Sri Lanka for decades.

What makes Fernando’s argument particularly untenable is that it directly contradicts established judicial findings. On 14 November 2023, the Supreme Court of Sri Lanka delivered a landmark 4-1 judgment holding several senior officials of the Rajapaksa regime directly responsible for the country’s worst economic collapse, ruling that they violated the fundamental rights of the people and breached the public trust. This judgment was a powerful vindication of the millions who took to the streets during the 2022 Aragalaya and ultimately forced the Rajapaksa brothers out of power.

Yet, despite such authoritative clarity, Nalin Fernando attempts to erase the failures of those leaders and instead places blame on the youth who rebelled against unbearable state-created conditions.

The historical truth: Insurrections did not create crisis-crisis created insurrections

Every insurrection in Sri Lanka arose directly from the economic, political, and social conditions manufactured by the ruling regimes of their respective periods. These uprisings were not romantic adventures, nor were they reckless impulses of misguided youth. They were the inevitable consequence of: crushing youth unemployment; widening inequality; state repression and authoritarianism,

rampant corruption and the complete absence of democratic pathways for grievances.

Decades of unfulfilled promises, bad governance, and political arrogance fostered an environment where rebellion was the only option left for a generation abandoned by the state.

The post-2024 reality: A country broken by misrule

By September 2024, the conditions that historically triggered insurrections had become even more visible: a bankrupt nation; an eroded public trust in politicians; a discredited political class; and a generation pushed to the margins by economic collapse.

These are not abstract academic theories-they are lived experiences, recorded in national statistics, court judgments, and the collective memory of the people.

Nalin Fernando’s misrepresentation: A strategy of political evasion

Against this backdrop, Nalin Fernando’s claim of a 76-year setback is revealed as nothing more than a political smokescreen. By shifting blame onto the youth, he avoids confronting the core truth: Sri Lanka’s setbacks were created by the very political elites he aligns with. His refusal to recognise this reality exposes either an extraordinary level of ignorance or a deliberate attempt to rewrite history. Suppose he genuinely wants to understand the causes of the 1971 and 1988/89 uprisings. In that case, he should start by examining the actions of his own political mentor, Ranil Wickremesinghe, whose policies played a crucial role in creating the environment that fueled those rebellions.

Trump card of Namal Rajapaksa

The second Trump card was played by Namal Rajapaksa, whom Nalin Fernando referred to as a prince. Namal said, ‘We will topple the Government at the very first chance we get.’

It is interesting to know that given the strong Government of AKD, what are the possibilities that Nmal could topple the Government? In other words, it is a very relevant and key question regarding the current political landscape in Sri Lanka.

Namal Rajapaksa’s statement, ‘We will topple the Government at the very first chance we get,’ is aggressive political rhetoric. However, the political reality, particularly the strength of the current Government led by Anura Kumara Dissanayake (AKD) and the National People’s Power (NPP), makes this a significantly difficult prospect for the Sri Lanka Podujana Peramuna (SLPP).

Here is an analysis of the possibilities of Namal Rajapaksa’s faction toppling the AKD Government:

The political and parliamentary hurdle

The biggest challenge for the SLPP is the NPP/AKD Government’s current strength in Parliament.

Two-thirds majority: The NPP achieved a landslide victory in the 2024 parliamentary elections, securing a two-thirds majority (159 out of 225 seats).

Implication:This means the Government has an unprecedented level of stability. They can pass any legislation, including constitutional amendments, without needing support from the SLPP or other opposition parties.

Toppling mechanism:

The primary constitutional method to ‘topple’ a Government in between general elections is a No-Confidence Motion (NCM). For an NCM to succeed, the Opposition would need a simple majority (113 votes). Given the NPP’s 159 seats, the SLPP, with its significantly reduced numbers, has virtually zero chance of passing an NCM.

The SLPP’s diminished strength

The political capital of the Rajapaksa family and the SLPP has dramatically decreased since the 2022 economic crisis and the subsequent elections.

Electoral defeat:

The 2024 elections saw the SLPP routed, a stark sign of public repudiation against the old political establishment, which many citizens blame for the economic collapse.

Loss of credibility: The primary platform of the NPP was its anti-corruption and ‘system change’ narrative, which directly targeted the Rajapaksa era’s governance. For the SLPP to gain enough public support to destabilise the current Government, they would need a major resurgence in credibility, which is currently lacking.

Economic and governance stability

The NPP’s strength is currently underpinned by a mandate for change and progress in the economy.

Public mandate: AKD won on a massive anti-establishment wave. The public gave the NPP a strong mandate to implement its promised reforms, including an anti-corruption drive and economic restructuring.

Economic performance: While the economic recovery progresses slowly under the IMF-led program, any meaningful, positive progress (for example, in stabilising inflation or reducing shortages) will strengthen the Government’s legitimacy and make it much more difficult for the opposition to exploit public discontent.

Possible ‘First Chances’ (low possibility)

Namal Rajapaksa’s statement implies he is waiting for a crack in the Government’s stability. The only realistic possibilities would be:

nMassive internal division: If the NPP alliance were to fracture significantly, with a large block of over 40-50 MPs breaking away to join the opposition. Given the party’s strong ideological cohesion, this is highly unlikely.

nMajor policy catastrophe: A new, unexpected economic or political crisis of the magnitude of 2022 that completely erodes public trust and triggers renewed mass protests (‘Aragalaya’) against the NPP. Even in this scenario, the anger would likely benefit other anti-establishment forces rather than the SLPP.

nScheduled elections: The most viable ‘chance’ is waiting for the next scheduled Provincial Council, Presidential, or General Election. The SLPP’s strategy is likely focused on rebuilding its base to compete in the next electoral cycle, rather than toppling the Government through parliamentary means in the short term.

The chances of Namal Rajapaksa’s SLPP faction successfully toppling the AKD/NPP Government through any parliamentary method in the near future are very slim. The current power balance, the Government’s stability, and the lack of any credible realignments all indicate a political climate not favourable to such a change. Whether Namal has some secret strategy or if his recent comments were made in a moment of excitement-like many others present-is still uncertain. What is clear, however, is that there is no realistic way at this point for such a political shift to happen. In that context, Namal’s expectations appear less like a practical plan and more like an optimistic daydream.

Summary

In the lead-up to the 21 November 2025, Nugegoda Rally, the Opposition tried to revive their declining narrative by presenting two so-called ‘trump cards.’ Nalin Fernando distorted history by blaming the youth for the JVP uprisings of 1971 and 1988/89, ignoring decades of elite-led mismanagement validated by the Supreme Court. Meanwhile, Namal Rajapaksa boldly claimed the Government could be overthrown at the earliest opportunity. However, a close review of parliamentary math, Government stability, and public support shows that neither scenario is possible in the short term. What becomes clear is that the Opposition lacks new ideas, credible plans, and their ambitions are little more than a hopeful daydream.

The Sri Lanka Economic and Investment Summit 2025, to be held on 2 and 3 December, under the theme ‘Gateway to Growth – Asia’s Emerging Opportunity’ organised by The Ceylon Chamber of Commerce, is officially sold out, bringing together more than 850 participants, including over 100 international delegates from across the globe.

The strong global response reflects the Summit’s growing role as a central meeting point for business leaders looking to reconnect with Sri Lanka’s economy. Delegates from Austria, Bangladesh, Bhutan, China, Ethiopia, Germany, India, Indonesia, Iran, Iraq, Japan, Malaysia, Maldives, Pakistan, Russia, Saudi Arabia, Singapore, Sweden, Switzerland, and the United States, will participate at the event.

The summit will feature over 40 high-profile speakers from Sri Lanka and overseas, covering a wide span of sectors including trade, investment, manufacturing, renewable energy, technology, logistics, tourism, financial services, and agriculture. The agenda is designed to give businesses unique insights into emerging opportunities, policy developments, and areas where private sector participation can drive growth.

Participants will also have the opportunity to hear directly from senior policymakers and industry specialists, offering a direct channel to understand new reforms and the direction of Sri Lanka’s economic recovery.

In addition to the Summit’s proceedings, participants will also have the opportunity to network with delegates from the abovementioned countries via B2B and government-to-business meeting opportunities, to explore trade, investment, and business growth opportunities. With the event now sold out, the Ceylon Chamber has now begun scheduling B2B meetings among registered participants.

Supporting the ’16 Days of Activism’ to end gender-based violence, a series of programs were held on Monday within Parliament. Accordingly, badges symbolising the commitment to end gender-based violence were pinned onto Prime Minister Dr. Harini Amarasuriya and Speaker Dr. Jagath Wickramaratne.

Expressing their support for today’s program, women Parliamentarians as well as male Parliamentarians, and members of the Parliamentary staff, arrived dressed in orange or orange-accented attire.

During this program organised by the Women Parliamentarians’ Caucus with the support of the United Nations Population Fund (UNFPA), badges were also presented to the Deputy Speaker Dr. Rizvie Salih, Deputy Chairperson of Committees Hemali Weerasekara, Leader of the House Minister Bimal Rathnayake, Chief Government Whip Minister Dr. Nalinda Jayatissa, and Chief Opposition Whip Gayantha Karunathilaka. In addition, the Secretary General of Parliament Kushani Rohanadeera, Chief of Staff and Deputy Secretary General Chaminda Kularatne, and Assistant Secretary General Hansa Abeyratne were also presented with badges.

Furthermore, at the Members’ entrance of Parliament, badges were presented to all Members of Parliament to express their support towards ending gender-based violence.

The 16 Days of Activism is an annual global campaign observed from 25 November to 10 December against Gender-Based Violence (GBV). It begins on the International Day for the Elimination of Violence against Women and culminates on Human Rights Day. The aim of this program is to raise awareness and strengthen action worldwide to prevent and eliminate violence against women and girls.

The 2025 Global Theme of the ’16 Days of Activism’ announced by the United Nations Secretary-General emphasises the message: ‘Let’s unite to end digital violence against all women and girls.’

A special media briefing was also held by the Women Parliamentarians’ Caucus.

Representing the Caucus Prime Minister Dr. Harini Amarasuriya stated that this year’s theme calls for particular attention to be paid to ending violence occurring within digital spaces targeting women and girls. She further noted that beyond laws and policies, a broader social responsibility and attention is required to eradicate gender-based violence. She highlighted that the increase in the number of women representatives in Parliament to 22 this time is a positive development, and urged all parties, beyond political differences, to unite to eliminate gender-based violence across society.

Chair of the Caucus and Women and Child Affairs Minister Saroja Savithri Paulraj stated that 315 million women worldwide had been subjected to gender-based violence in 2024. She noted that this occurs in Sri Lanka as well, particularly within digital spaces, where incidents of harassment targeting women and female children, including in politics have increased significantly. Accordingly, the Caucus expects to submit a proposal to the Hon. Speaker to amend the Standing Orders to prevent women parliamentarians from facing verbal or other forms of harassment within Parliament. The Minister further stated that Parliament as an institution should set the first example to the country in eradicating gender-based violence. She invited everyone, regardless of political ideology, to unite in this cause.

Deputy Co- Chairperson of the Women Parliamentarians’ Caucus, Chamindranee Kiriella expressing her views, stated that according to a recent survey conducted by UNFPA and UN Women, individuals including women and girls frequently face various forms of online abuse. She said that 36.9% of such incidents involve the creation of fake identities, while 36.9% involve the distribution of obscene messages or videos. In Sri Lanka, one in every five women faces physical or verbal gender-based violence, she added, stressing that everyone must work together, beyond political differences, to change this situation and build a better society. She also extended her appreciation to UNFPA for collaborating in implementing this program within the Parliament of Sri Lanka.

Assetline Finance Ltd., which forms the core financial services pillar within the David Pieris Group, has reported a strengthened and increasingly resilient first-half performance for FY2025/26, with significant gains in asset growth, income enhancement, and core profitability for the six months ended 30 September 2025. Total assets expanded to Rs. 72,712 million, representing nearly 40% growth within the first half of the financial year; an achievement that underscores the Company’s accelerated balance sheet expansion and deepening market presence. This broader and more robust balance sheet was driven by sustained lending growth and continued improvements in asset quality.

Income generation also remained strong, with interest income rising to Rs. 6,732 million and net interest income increasing to Rs. 4,826 million, supported by healthy traction in lending and leasing operations, disciplined pricing strategies, and more efficient capital allocation. Profit before tax reached Rs. 2,940 million, while profit after tax stood at Rs. 1,416 million, underpinned by efficient collections and remedial measures, strengthened underwriting controls, and improved operating efficiency. In line with its commitment to national development, the Company contributed nearly 52% of its profit before tax toward government taxes during the period, reflecting a substantial and responsible fiscal contribution.

The lending portfolio expanded to Rs. 60,631 million, reflecting heightened credit demand across SME, micro-enterprise, and mobility-based customer segments. This represents a remarkable 42% growth during the first half of the financial year, demonstrating strong market traction and effective credit deployment. Equity also strengthened to Rs. 17,154 million, supported by retained earnings, resulting in a solid capital adequacy position that provides further capacity for accelerated growth. Asset quality metrics demonstrated clear improvement. The Gross Stage 3 Loan Ratio improved to 4.0% from 9.7% a year earlier, while the Net Stage 3 Ratio improved to 1.8% from 6.4%, reflecting a more stable and better-performing portfolio. Notably, the Stage 3 Impairment Coverage Ratio increased sharply to 55.0%, up from 37.9% in the previous year’s corresponding period, indicating stronger provisioning discipline and enhanced risk management practices. Liquidity indicators also remained healthy, supported by a balanced borrowing structure and prudent treasury management. Profitability and efficiency ratios further strengthened the Company’s financial profile. Return on Equity (ROE) rose to 17.1%, reflecting effective capital deployment and consistent earnings generation. Return on Assets (ROA) stood at 9.4%, underscoring the Company’s ability to deliver attractive returns relative to its asset base. Importantly, the Cost-to-Income Ratio improved to 39.8%, positioning Assetline Finance among the most efficiently managed entities in the industry and reinforcing the success of ongoing cost discipline and operational optimisation initiatives.

The Company continued to build on its empowerment-driven agenda by increasing access to credit for women-led enterprises, aligning financial inclusion objectives with responsible portfolio growth. Its 60-branch network further facilitated deeper regional penetration and broader access to financial services across the country. Director and CEO Ashan Nissanka stated that the first-half results reflect Assetline Finance’s disciplined execution, enhanced asset quality, and strengthened income base. ‘Our performance during this period demonstrates the scalability and resilience of our business model. We have sustained our growth trajectory while improving profitability, deepening asset quality, and operating with some of the strongest efficiency ratios in the sector. Our focus remains on customer empowerment, responsible lending, and delivering long-term value supported by robust governance and operational excellence.’ Assetline Finance’s upgraded A rating with a Positive Outlook from the Lanka Rating Agency further affirms its strong capital position and resilient risk framework. As the Company enters the second half of FY2025/26, it remains well-positioned to capitalise on rising credit demand, strengthen income streams, and continue enhancing stakeholder value through disciplined and sustainable growth.

On 15 October 2025, Sri Lanka Customs announced that it had collected Rs. 2,470 million (i.e. Rs. 2,470 million = Rs. 2.47 billion) in a single day – the highest ever recorded by the agency. As of that date, cumulative customs revenue in 2025 reached Rs. 1,867 billion (i.e. Rs. 1,867,000 million).

This achievement invites a deeper examination: is this a fortuitous one-time spike, or a signal of improved governance, better processes, and structural change? What are the drivers, and what does it bode for Sri Lanka’s fiscal health and tax policy environment? Below is a detailed analysis of the context, likely causes and caveats, and implications.

Historical context: Customs revenue in Sri Lanka

To understand the significance, one must situate this in the broader trend of customs revenue in Sri Lanka.

According to World Bank / CEIC data, ‘Customs and other import duties’ historically have accounted for around 14.34 % of total tax revenue in 2023.

In 2016, customs and import duties collections (nominal) were about Rs. 361,596 million (i.e. Rs 361.6 billion)

More recently, Sri Lanka Customs has been aggressively pursuing higher revenue targets. For 2024, the agency set and met a target of Rs. 1,533 billion (i.e. ~Rs. 1,533,130 million)

By mid-2025, Customs had already crossed Rs. 1,000 billion in cumulative collections in just six months – a pace faster than in previous years – and has expressed confidence of exceeding the 2025 target of Rs. 2,115 billion.

In September 2025, customs revenue peaked at Rs. 253.152 billion – a new monthly record – a 74.6 % year-on-year jump.

In fact, in September 2025 alone, the collections exceeded the monthly target (Rs. 185 billion) by about 37 %

Sri Lanka Customs also achieved its highest monthly collection previously in August 2025 (Rs. 235 billion) with similar drivers cited: technology, enforcement, and trade growth.

Thus, the single-day record of Rs. 2,470 million is part of a broader upward trajectory of customs revenue in 2025.

What could drive such a high single-day collection?

A few hypotheses, supported by available evidence, help explain how this ‘record day’ may have come about.

1. Large imports /lumpy transactions

Often, customs revenue can spike if large shipments (e.g. petroleum, machinery, capital goods, vehicles, industrial raw materials) are cleared on a particular day. Such single-day spikes may reflect concentrated import activity rather than steady growth across all days.

In 2024 the Customs Department itself noted that import sectors such as petroleum, cigarettes, steel, and appliances contributed significantly to the record collections.

Thus, it is plausible that on 15 October 2025 a cluster of high-value clearances occurred (e.g. a large petroleum shipment, or vehicle imports) triggering the spike.

2. Import volume surge (easing of restrictions)

If import restrictions were eased (whether legally or in practice), that could lead to backlogged shipments being cleared, producing a ‘catch-up’ effect – a large volume of goods processed on that day.

However, in the recent past Sri Lanka has sometimes imposed stricter controls on imports to manage foreign exchange constraints. In 2024, for example, vehicle imports were restricted, and vehicle imports contributed less than 6 % of total customs revenue under constraints.

Hence, while a relaxation of import controls could contribute, there is no public confirmation that a policy change specifically occurred on or just before 15 October. (I could not locate credible public information that the Government officially relaxed vehicle import restrictions on that date.)

3. Exchange rate (Rupee depreciation) and valuation effect

When the rupee depreciates relative to foreign currencies, the rupee value of import invoices (dollars, euros, etc.) increases, which directly raises the rupee duty/tax base. If the rupee had depreciated relative to the date of invoicing or relative to customs valuation, that could inflate the rupee-term revenue collected on that day.

However, this effect applies broadly across all days, not just one day. A one-day spike due to exchange rate alone would require that many invoices be cleared on that day and valued according to a weaker rupee. Without more data on invoicing dates, exchange rate fluctuations, and customs billing rules, this is a plausible contributing factor but likely not the sole cause.

4. Improved enforcement, reduced leakages and technical systems

Customs in recent years has emphasised modernising operations, improving risk management, automating processes, and plugging revenue leakages.

The Customs Document Notification System (CDNS) was introduced to facilitate faster communication with importers/exporters and reduce delays and misreporting.

Enhanced enforcement (detection of undervaluation, smuggling, misclassification), tighter audits, and use of data analytics can yield sudden ‘catch-up’ revenue when anomalies are cleared.

Reforms in internal oversight, anti-corruption measures, integrity units, and disciplinary controls could reduce bribery or collusion, thus improving compliance yields (see more below).

Better alignment between customs, ports, and trade facilitation may reduce bottlenecks so that backlog accumulations are cleared in fewer days, producing revenue peaks.

Given that Sri Lanka Customs has already been reporting record monthly and cumulative figures, it’s reasonable to see the 15 October feat as one manifestation of improved efficiency and stricter oversight, rather than pure luck.

5. Timing/Fiscal calendar and target incentives

It is possible that customs management may aim to concentrate high collections toward the latter part of revenue cycles or to meet quarterly/annual targets. There could be deliberate effort to accelerate clearances or enforce backlog shipments on a particular date.

Hence, a combination of management drive, backlog clearing, and enforcement push may concentrate collections.

Likely break-up of the Rs. 2,470 million: What composition?

Sri Lanka Customs has not publicly released a detailed line-item break-up (in readily accessible media) of exactly how much of the Rs. 2,470 million came from which sectors (petroleum, vehicles, general imports, excise, etc.). I could not find a credible source giving that precise split for 15 October 2025.

However, based on past patterns and statements by Customs:

High value imports such as petroleum, machinery, chemicals, electronics, and industrial inputs often dominate customs duty collections.

In past record collections, Sri Lanka Customs cited imports of petroleum, cigarettes, steel, appliances, among key contributors.

Vehicle imports, though heavily regulated, remain in many cases a high-duty category and may produce large payments when allowed.

Import duties, excise (on imports), value-added taxes on imports, surcharges, regulatory fees, and penalties might all contribute on that day.

If you wish, one may file a Right to Information/data request with Customs or the Finance Ministry to obtain the exact breakdown for that particular day.

Is it due to relaxing vehicle imports?

The record day might include some vehicle import clearances, but evidence suggests that vehicle imports have been constrained in recent policy. In 2024, vehicle imports were limited and accounted for less than 6% of total revenue under restrictions.

Unless a sudden policy change occurred just before 15 October which eased the import of vehicles (and was not yet in the media), it is unlikely that easing vehicle imports alone would explain the entire magnitude of the record.

If you discover that the Government or Customs had issued a new Gazette or concession around that date lifting or loosening vehicle import quotas or tariffs, that could have triggered a wave of vehicle clearances. But absent that, vehicle import relaxation is likely a partial and not dominant factor.

Is it due to Rupee depreciation?

As noted above, rupee depreciation inflates the rupee-equivalent of foreign-currency invoices and thus the nominal rupee revenue. But:

That factor tends to affect all days, not only one specific day.

For the incremental spike to be driven largely by depreciation, customs would have to clear unusually many high-value imports on a day when new lower rupee estimates apply (e.g. using the then-prevailing rate).

If importers delayed clearances hoping for beneficial exchange rates, that could concentrate activity when they consider the rate favourable.

Thus, currency depreciation is a contributing background factor but unlikely the main proximate driver.

Impact on other tax policies and the broader fiscal ecosystem

A notably higher customs revenue yield interacts with many other elements of the Sri Lankan tax and fiscal system. Some of the key implications:

1. Relief / Substitution pressure on other taxes

If customs revenue (an indirect, trade-based tax) becomes more predictable and higher, it may reduce pressure to raise direct taxes (income tax, corporate tax) sharply. The Government might feel more fiscal breathing room and less need to burden domestic taxpayers further.

Conversely, if customs collections rise because import volumes expand, the Government might be tempted to relax VAT or excise increases, though that risks eroding the base.

2. VAT / SSCL / Excise

Many imports are subject not only to customs duty but also to VAT (Value-Added Tax) on the landed value plus surcharges (e.g. Special Commodity Levy, or SSCL). Thus, stronger customs collections often beget higher VAT inflows (on imports).

If import volumes shift, that can influence the ratio of VAT collected domestically vs. on imports, potentially changing composition of VAT revenue.

If customs performs better (e.g. lower evasion or leakages at import stage), that adds to the VAT base (since underreporting or undervaluation often reduces VAT yields too).

The Government may also use improved customs revenue performance as a justification for relieving VAT/excise on certain goods (for political or growth reasons) in domestic sectors.

3. Income taxes (Direct taxes)

Indirect tax windfalls (customs, VAT) do not directly substitute for income tax, but they can ease the pressure on collections from income/corporate tax.

However, reliance on trade taxes is less stable, being subject to fluctuations in imports, global demand, and exchange rates. So a prudent tax policy should not overly reduce efforts to broaden and strengthen direct tax bases (personal income tax, corporate tax).

If the Government views customs collections as ‘free surplus,’ there is a risk of complacency in direct tax reforms – a risk to long-term tax sustainability.

4. Fiscal space, borrowing and debt management

Higher customs revenue expands the Government’s fiscal space: more ability to service debt, reduce deficits, invest in infrastructure or social spending.

It may reduce the need to borrow domestically or externally, or help reduce reliance on short-term or high-cost borrowing.

Stronger revenue performance strengthens credibility with lenders (domestic bond markets, IMF, bilateral donors) and can support fiscal consolidation.

5. Exchange rate and trade policy feedback

If import volumes rise to generate higher customs revenue, the trade deficit could widen (unless exports expand in tandem), putting pressure on foreign exchange reserves.

The Government may need to manage the balance between boosting imports (and revenue) and preserving external stability.

Is this a one-time spike or evidence of structural efficiency?

This is the key question. Some observations suggest the record day is not merely a fluke:

1.Sustained upward trend: Sri Lanka Customs is already generating record monthly and cumulative numbers in 2025, suggesting systemic improvements.

2.Technological and procedural reforms: The introduction of systems such as CDNS, better notification, digital workflows, stronger audit and oversight point to structural upgrades.

3.Enforcement intensification: Statements by customs and media point to more aggressive enforcement, risk profiling, checks on misclassification and undervaluation, suggesting revenue gains are not only from volume but from improved compliance.

4.Management targets: The fact that Customs surpassed Rs. 1 trillion in just six months, ahead of previous years’ pace, suggests more ambition and better internal execution.

That said, unavoidable volatility in import activity, external demand, and exchange rates means occasional spikes may occur even in less efficient systems. It’s possible that 15 October 2025 just happened to align with favourable import shipments, backlog clearances, or valuation timing – amplifying the effect of underlying improvements.

Thus, the record day is likely a combination of structural gains and favourable timing, not purely a random anomaly.

Role of anti-corruption, governance and enforcement under the new Government

One cannot ignore the governance dimension in evaluating success in revenue agencies like customs.

A stricter clampdown on bribery, collusion, and informal ‘speed money’ or discretionary waivers can reduce leakages in customs. If the new Government has strengthened incentives for integrity, accountability, internal audits, and disciplinary controls, then greater revenue capture becomes plausible.

The establishment or strengthening of internal affairs or investigation units within customs (to investigate complaints, malpractices) may deter corruption. In earlier reforms, Customs had opened internal oversight mechanisms to pursue public complaints and reduce uncollected revenues.

Enhanced coordination among agencies (Customs, Ports Authority, law enforcement) can reduce smuggling, contraband, undervaluation schemes, and interdiction of fraudulent trade flows.

Political will matters: if the top levels of Government emphasise performance, set measurable targets, and protect the autonomy of customs commissioners, the agency’s morale and discipline can improve.

However, governance reforms take time. One high-revenue day is insufficient to conclude that bribery has evaporated; one must monitor consistency, audit reports, public transparency, and whistle-blower outcomes.

Benefits to Sri Lanka of strong Customs revenue collection

If sustained, these advantages can be significant for Sri Lanka’s economy and fiscal health:

1.Improved fiscal balance / reduced deficit

Higher revenue helps narrow the fiscal gap, reduce reliance on borrowing, and stabilise public finances.

2.Debt servicing and investor confidence

Strong revenue performance reassures creditors (domestic and external) and ratings agencies, potentially lowering borrowing costs.

3.Scope for productive spending

Additional revenue can be channelled into infrastructure, education, health, or growth-promoting capital investments – rather than purely covering deficits.

4.Reduced burden on domestic taxpayers

If trade taxes rise, pressure to increase income or corporate taxes may be eased, which could support growth and investment.

5.Better macro stability

With stronger revenue, the reliance on volatile or ad hoc sources decreases, enhancing predictability in budgeting and monetary policy.

6.Opportunity for tax reform

A healthier revenue base gives breathing room to rationalise exemptions, improve equity, and rebuild the direct tax base over time.

7.Signalling effect

High performance by a core revenue agency signals that reform momentum is real, improving stakeholder confidence.

Risks, caveats and sustainability issues

No revenue story is without risks. Some key caveats:

Volatility and unpredictability: Customs revenues depend heavily on import activity, global demand, exchange rates, and policy shifts. Reliance on trade taxes is inherently more volatile than domestic taxes.

Trade deficit pressure: If import volumes rise sharply to generate revenue without export growth, foreign exchange reserves and the trade balance could suffer.

Evasion shifting: Tightening at the border may drive misreporting, smuggling, or shifting of trade through illegal channels unless enforcement remains strong.

Overreliance and complacency: The Government must resist complacency and not neglect reforms in direct tax, base broadening, and structural tax policy.

Temporary backlog clearance: Some of the high collection might reflect backlog clearances rather than sustainable incremental growth.

Leakage under new modalities: As the system becomes more digitised, new forms of evasion (e-invoice fraud, digital documentation manipulation) may emerge.

Hence, sustainable revenue growth demands ongoing investment in capacity, audit, analytics, human resources, integrity, and policy alignment.

Conclusions and recommendations

The Rs. 2,470 million single-day collection is impressive and newsworthy, but should be viewed in the context of already record-breaking performance in 2025 rather than as an isolated anomaly.

It likely reflects a confluence of backlog clearance, lumpy import shipments, valuation effects, improved enforcement, and governance upgrades.

The long-term value lies if this performance becomes the new normal, not a peak. That requires sustaining momentum, resisting pressures to relax enforcement, and continuing process modernisation.

For the Government, the challenge is to prudently use this additional revenue – ensuring it strengthens the fiscal position, funds development without runaway spending, and complements reforms in direct tax and welfare systems.

For businesses and importers, clarity, consistency, and transparency in customs duty rates, valuation rules, classification regimes, and processing times will be key to planning and trust.

For tax policy and economic stability, the Government should not lean excessively on customs revenue at the expense of deepening domestic tax reforms and diversifying revenue sources.